Bulletin of the Transilvania University of Braov

Series V: Economic Sciences Vol. 7 (56) No. 1 - 2014

EFFECTIVENESS OF TRAINING AND

DEVELOPMENT ON EMPLOYEES
PERFORMANCE AND ORGANISATION
COMPETITIVENESS IN THE NIGERIAN
BANKING INDUSTRY

H. O. FALOLA1 A. O. OSIBANJO1 S. I. OJO1

Abstract: Training and development is indispensable strategic tool for

enhancing employee performance and organizations keep increasing training
budget on yearly basis with believe that it will earn them competitive edge.
The main objective of this study is to examine the effectiveness of training
and development on employees performance and organisation competitive
advantage in the Nigerian banking industry. Descriptive research method
was adopted for this study using two hundred and twenty three valid
questionnaires which were completed by selected banks in Lagos State,
South-West Nigeria using simple random sampling technique. The data
collected were carefully analyzed using descriptive statistics to represent the
raw data in a meaningful manner. The results show that strong relationship
exists between training and development, employees performance and
competitive advantage. Summary of the findings indicates that there is strong
relationship between the tested dependent variable and independent
construct. However, bank management should not relent in their quest to
train their staff to develop new ideas that will keep improving and retaining
employee performance.

Key words: training, development, performance, competitiveness.

1. Introduction and competence capable of improving

The survival of any organization in the
competitive society lies in its ability to
train its human resource to be creative,
innovative, inventive who will invariably
enhance performance and increase
competitive advantage [17], [31], [46].
Training and development is an aspect of
human resource practices that help in
enhancing employees skills, knowledge,
employees ability to perform more
efficiently [39]. Training and development
play a vital role in the effectiveness of an
organisation [21]. It is one of the most
pervasive techniques for improving
employees performance enhancing
organisation productivity in the work place
[22]. Employees are the indispensable
asset and key element of gaining
competitive advantage of any organization

1
Department of Business Management, School of Business, Covenant University, Ota, Nigeria.
162 Bulletin of the Transilvania University of Braov Series V Vol. 7 (56) No. 1 - 2014
and training is essential tool for its
actualization [23]. The level of
competency, skills and ability of the
workforces of an organization influences
its ability to preserve its obtained positions
gain competitive advantage [3, 23].
Meanwhile, employees competence, skills
and pro-activeness is directly proportional
to the level at which organization can
compete with others. Organizations are
confronting with increased competition
resulting from changes in technology,
economic environments, globalization etc.
[18]. As it could be inferred from above
that not much research has been conducted
on the relationship between all of these
constructs. In this regard, this study aimed
to contribute to the existing knowledge
particularly in the sphere of capacity
development. It is to this end that this
paper seeks to critically examine the
effectiveness of training and development
on employees performance and
organisation competitiveness. The
significance of this work stemmed from its
objectives as follows: (i) Examine how on
the job training and development affect
employees performance; (ii) Analyze the
effectiveness of cognitive training methods
on employees proficiency; (iii) Evaluate
the impact of behavioural training
techniques on employees productivity; and
(iv) Analyze the benefits of training
methods on organizational performance.
1.2. The Significance of the Study
Training becomes inevitable the moment
an organization realizes the need for
improvement and expansion in the job. But
often times, organizations embark on job
enlargement and enrichment to promote
employees' morale, motivation and
satisfaction when in the fact the real
problem with work performance lies in
capacity development. The study becomes
necessary because many organizations in
this contemporary world are striving to gain
competitive edge and there is no way this
can be achieved without increasing
employees' competencies, capabilities, skills
etc through adequate training designs.
However, the study results will help the
management to identify the challenges
effects of employees training on
organizational performance, hence
determine the areas where improvements
through training can be done. It will also
help the management in planning for the
development and implementation of ef-
fective and efficient training needs that will
lead to increased performance of the banks.
2. Literature Review
2.1. Training and Development
Training and development are
indispensable strategic tools for effective
individual and organisation performance,
thus, organisation are spending money on
it with confidence that it will earn them a
competitive advantage in the world of
business [31], [17], [48], [7] However, for
any organisation to achieve its stated goals
and objective in this competitive world,
adequate and relevance training and
development of staff cannot be over
emphasized. Organisation are expected to
identify training need of its employees and
design training programmes that will help
to optimally utilize their workforce
towards actualization of organisation
objective [27]. Training and development
is a techniques use to transfer to the
employees relevant skills, knowledge and
competence to improve employees
performance on current jobs and future
assignment [26], [35], [41]. It is not
negotiable for organisations to adequately
train their employees for efficient and
H. O. FALOLA et al.: Effectiveness of Training and Development on Employees ...
optimal performance toward the realization
of their set goals and objectives [4].
Employees training and development is a
strategic determination to facilitate learning
of the job related knowledge, skills, ability
and behavior that are crucial for efficient
performance capable of enhancing
organizational effectiveness [38]. Training is
requisite to enhancing workers capability,
reasoning faculty and competence [31]
which will improve organizational
performance [8] and as well help in gaining
competitive edge [3]. Training and
development increases employees
efficiencies, innovation, invention, capacity
to accept new technologies and techniques
[35]. It is important to note that
organizations must be able to identify the
needs for training and development and
select techniques suitable for these needs,
plan how to implement them and thereafter
evaluate outcome [33].
2.2. Related Theories of Employee
Training and Development
There have been various theories
propounded to explain the relevance of
training needs in any establishment of
organization. In social learning theory,
employees acquire new skills and
knowledge by observing other members of
staff whom they have confidence in and as
well believe to be credible and more
knowledgeable [10], [34]. The theory
posited that training and learning is
influenced by persons self-efficacy and his
ability to successfully learn new skills
which can be influenced by
encouragement, oral persuasion, logical
confirmation, observation of others [28].
Reinforcement theory believed that
training is a strategic tool to make job
interesting to the workers and as the
avenue for the employees to improve
themselves for optimal performance which
can culminating to promoting employees
163
for outstanding performance, innovation,
creativity as a result of training attended
[2]. The resource-based view (RBV) of the
firm advocated that an organisation can
gain competitive advantage by attracting
and retaining competent human resources
and as well identify relevant training for
them that will keep improving their
capacity for optimal performance. By
implications, the effectiveness of training
and learning depends on the pattern of the
job related knowledge, skills, capability,
competencies and behavior that are
important for greater performance which
invariably be capable of influencing
organizational success.
Hypotheses: training and development
Training techniques are classified into
behavioral or On-the-job (orientations, job
instruction training, apprenticeships,
internships and assistantships, job rotation
and coaching) and cognitive or Off-the-job
(Lectures, computer-based training, games
and simulations etc. [36] These tend to
influence employees performance and
organizational competitiveness; therefore
we propose: H1: Behavioral training
techniques have no significant effect on
employee performance and
organizational effectiveness; H2: There is
negative impact of cognitive training
techniques on employees optimal
performance.
2.3. Research Model
This study will give attention to the
effectiveness of training and development
on Employees Performance and
organizational competitiveness in some
selected banks in Lagos. However as
obtained in the literature reviewed above,
we proposed the following model depicted
in figure 1.
164 Bulletin of the Transilvania University of Braov Series V Vol. 7 (56) No. 1 - 2014
Fig. 1. Proposed Study Model
3. Research Methodology
The empirical data for the study were
collected through a well-structured
questionnaire, which was prepared and
distributed among the members of staff in
selected banks in Lagos State, South-West
Nigeria. The reason for the choice of
location for the study is because it plays
host to the headquarters of most of the
banks. Effectiveness of training and
development was measured using a 16-
item instrument which was divided into
Sections A and B. Section A consisted of 6
items which was used to gatherer bio data
information from the respondents such as
their age, sex, marital status, education
background, position, working experience;
Section B consisted of 10 items regarding
the constructs of the subject matter. Five-
point Likert scale (5-Strongly Agreed, 4-
Agree, 3-Undecided, 2-Strongly Disagree,
1-Disagree) that best describes the extent
to which the respondents agree with each
items in the questionnaire was used.
Descriptive methods of analysis were used
to analyze the data. A total of 250 copies
of questionnaires were administered within
the scope of selected location, having
sorted the returned questionnaires, only
223 copies of questionnaires representing
89.2% were validly used while 27 copies
(10.8%) were either discarded due to
improper filling or unreturned. The study
tends to add to the existing study on
Human Resource issues and organizational
competitive advantage.
4. Result & Discussion
The demographic characteristics of the
respondents indicate that 117(52.5%) of
the sample size was male while
106(47.5%) were female, which implies
that the population of male respondent is
higher than female. Meanwhile,
177(79.4%) (Cumulative) of the
respondents were within an economically
active population. Moreover, 103(46.3%)
of the respondents were married, while
117(52.5%) were single and 5(2%) were
either divorced or separated, though the
reason for their present marital status could
not be ascertained as at the time of
documenting this report. Regarding the
years of work experience; 97(43.5%) of
the respondents had worked between 1 and
9 years; while 88(39.5%) have put in
between 10-19 years; 38(17%) have spent
20 years and above.
Hypotheses Testing
The skewness and kurtosis are of
primary important because they are
H. O. FALOLA et al.: Effectiveness of Training and Development on Employees ... 165

indicative of extent to which variables are mentoring plays a significant role in training
not normally distributed. Kline, 1998 posited employees for better performance (Mean =
that skewness above 3.0 and kurtosis above 4.1166). Meanwhile it was also discovered
10 indicates serious departures from that Coaching is a strategic methods of
normality in a distribution. With this getting the best out of the employees (Mean
criterion, none of the variables posed any of= 3.9148). While Apprentice and Job
problem of normality. However, from Table rotation enhance employee performance
1, induction and orientation is effective in (Mean = 4.1883, 3.9686) respectively.
equipping employees with the practice and Therefore, it would be concluded that
core value of the organisation and what is behavioral training techniques have
expected of them to do (Mean = 4.2197). In significant effect on employee performance
addition, most of the respondents agreed that and organizational effectiveness.
Table 1
Descriptive statistics of respondents on effectiveness of behavioral training techniques
N Mean Std. Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error
Induction and
223 4.2197 .81161 -1.545 .163 3.720 .324
Orientation
Mentoring 223 4.1166 .92748 -.918 .163 .346 .324
Coaching 223 3.9148 .92848 -.715 .163 .083 .324
Apprentice 223 4.1883 .82770 -.845 .163 .418 .324
Job Rotation 223 3.9686 1.06285 -1.005 .163 .398 .324
Valid N (listwise) 223

Further to Table 2, majority of the In addition, most of the respondents

respondents were of the opinion that believe that the computer based training is
professional; training improves employees the most effective off-the-job training
skills and competencies (Mean = 4.3139). techniques to train employees to gain
competitive advantage. (Mean = 4.5785).

Table 2
Descriptive statistics of respondents on effectiveness of cognitive training techniques
N Mean Std. Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Std. Error Statistic Std. Error
Professional
223 4.3139 .83835 -1.248 .163 1.107 .324
Course/Training
Lecture 223 3.7399 1.17196 -.548 .163 -.967 .324
Role Playing 223 3.8206 1.07976 -.742 .163 -.234 .324
Computer Based
223 4.5785 .61650 -1.641 .163 3.634 .324
Training
Game and
223 3.9552 1.13414 -.884 .163 -.312 .324
Simulation
Valid N (listwise) 223
166 Bulletin of the Transilvania University of Braov Series V Vol. 7 (56) No. 1 - 2014

However, it was also discovered that
Lecture, role playing and game and
simulation can also wilding the employees
reasoning and be innovative (Mean =
3.7399, 3.8206 and 3.9552 respectively).
Therefore, it would be concluded that
cognitive training techniques have
significant effect on employees optimal
performance and creativity.
The results in table 3 indicate that both
behavioral and cognitive training
techniques enhances employees capacity
(Mean=4.4170) enrich employees efficacy
(Mean= 4.4619) promote innovation and
creativity for competitive advantage (Mean
= 4.3857) and it developed employees
skills and knowledge for optimal
performance (Mean = 4.4350).

Table 3
Descriptive statistics of respondents on Impact of behavioral and cognitive training
techniques on effectiveness
N Mean Std. Deviation Skewness Kurtosis
Statistic Statistic Statistic Statistic Std. Statistic Std.
Error Error
Enhance Employee
223 4.4170 .78331 -1.906 .163 5.249 .324
capacity
Enrich Employees'
223 4.4619 .72107 -1.684 .163 4.316 .324
Efficiency
Promote Innovation and
creativity for Competitive 223 4.3857 .77933 -1.486 .163 2.900 .324
Advantage
Develop Employees' Skills
223 4.4350 .67386 -.964 .163 .494 .324
and Knowledge
Improves organisation
223 4.1211 1.06908 -1.248 .163 .959 .324
performance
Valid N (listwise) 223

Managerial Implications delivered to their employees. It will help

In the modern and complex business
environment, employee training and
development is one of the reliable source
of competitive advantage to compete with
the changing and competitive business
world. Training and development is
beneficial to employees in particular and
the organisation in general. This research
work will help organization to understand
the importance of training and
development. It will also help
organization to understand which factors
are important to keep in mind during the
training and how a good training can be
them to understand that it is very necessary
for them to give training to their
employees so that they could perform the
assign task in a better way. Above all, it
becomes imperative to state that without
training, there will be no development.
Therefore, for every organization to
survive, training must be seen by
management as "a means to an end".
5. Conclusion/Recommendations
Training is importation for the survival
of any organisation. It is also imperative
for effective performance of employees,
enhancement of employees ability to
H. O. FALOLA et al.: Effectiveness of Training and Development on Employees ...
adapt to the changing and challenging
business environment and technology for
better performance, increase employees 3.
knowledge to develop creative and
problem solving skills.
Meanwhile, all the relationships
proposed among the variables in the 4.
research model were tested and it was
found that relationship exists amongst the
variables having subjected the collected 5.
data to empirical analysis with the use of
descriptive statistics. However, the results
of the findings indicated that training and
development affects employees
performance and organizational 6.
effectiveness, which implies that effort
must be made to ensure that employees
skills and knowledge are fully
underutilized through adequate and timely
training design and implementation. The
overall result showed that proposed 7.
hypotheses tested were accepted. It is
therefore recommended that Individual
should be more proactive and seek to be
more creative and innovative to contribute
their quota through their profession and
skill. Employers of labour and decision
makers should endeavour to create
enabling training environment and 8.
favorable training policies that will give
every worker opportunity to attend
training. Management should also take into
consideration the training need of each
workers and act as appropriate.
9.
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